I shall not speak for long. I simply want to make two, related, observations on this clause and the next about the vaccine research and development credit, or tax relief, which is designed to encourage investment in research on vaccines. The clause is welcome, because it corrects a loophole, and neither I nor, I am sure, hon. Members on either side of the Committee, object to its overall thrust.
My main observation is that we in the United Kingdom have a currency called sterling that is familiar to everyone. Everything that we do in our everyday lives is denominated by it: company accounts are denominated in sterling, and it is clear and overt. For small and medium-sized businesses, accountants and everyone else, turnover is clear and they can predict pretty well what their turnover and profit will be. Consequently, they are able to ascertain whether they qualify for certain reliefs and what size of business they are classified as.
Exchange rates fluctuate and are uncertain, however. At times over the past five to 10 years, we have seen sterling move quite dramatically against the dollar and the euro, so businesses might be caught unawares. As I said, I do not object to the clause in principle, but businesses might not know into which category they fall. A business might be working on the basis that it falls within the small or medium-sized category, which might be clear from the staffing levels. However, it might not be clear whether that business falls into that category in terms of either its balance sheet value, which does not necessarily move dramatically during the year—although the exchange rate might fluctuate—or its turnover, which would enable it to qualify for the credits under clauses 48 and 49.
Throughout the Bill, pretty much everything is denominated in sterling. Duties, corporation tax, grants, credits, the reliefs for investment in the music industry and a lot of the capital and asset transfers—they are all denominated in sterling. Therefore, why is uncertainty being created in clause 48? I am sure that the Minister can tidy the issue up fairly quickly. Is the answer that we are subject to EU regulations? If so, which EU regulations tie the Minister’s hands in that regard? Why are we denominating turnover and balance sheet value in sterling, which creates an enormous amount of uncertainty and makes it difficult to plan during the year, as to whether a tax credit will be achieved? I urge the Minister to make a small change and denominate those figures and values in sterling.
If the hon. Gentleman checks the record, he will realise that he just asked me why we were denominating in sterling, but then urged that we do denominate in sterling.
I thought that that was what the hon. Gentleman meant, but it was not quite what he said.
In a sense, the approach that we have taken is the established approach in the tax system. Clause 48 makes a minor amendment. It does not seem sensible at this point to make such a significant amendment as that which the hon. Gentleman has suggested.